PAKATAN Harapan’s institutional reforms must continue under the new government so that Malaysia is able to attract investments, especially during these challenging times, said economists.

Their calls follow the announcement of the new Perikatan Nasional cabinet, which include politicians from Umno and PAS, parties that had stridently opposed PH’s policies.

Economists told The Malaysian Insight these reforms include stamping out corruption and political patronage, maintaining open and competitive tenders, and increasing accountability over how the government spends taxpayer funds.

Also in the pipeline are individual tax ID numbers to cut down on tax evasion and corporate liability rules, meaning companies can be held responsible for acts of bribery committed by their staff.

Such reforms are necessary if Prime Minister Muhyiddin Yassin’s administration wants to achieve its goals in the Shared Prosperity Vision 2030 (SPV2030) to reduce inequality and boost incomes of the bottom 40% of households, economists said.

These policies helped PH attract investors in its 22-month rule, seen in how foreign investment jumped by 48% in 2018, the year PH took over.

To halt these policies or pull back on them would send the wrong signal to international ratings agencies which investors rely on, said economists.

At the end of the day, they said, it is strong, robust and independent institutions like those in mature Western democracies that will ensure the country grows into an advanced economy.

“Investors will be watching whether the government regresses. Any change in leadership is bound to bring change in policy, so this causes anxiety for investors,” said economist Lee Heng Guie.

“Policies which are good for the country, for institutional and economic stability, these should be continued,” said Lee of the Socio-Economic Research Centre.

“Because when investors put money in a country, they do so on the premise of existing policies. They look for continuity. If you flip-flop, investors will shy away.

“So, what is important is to have policy clarity and to continue good policies. No need to reinvent the wheel,” Lee said referring to PH policies aimed at improving good governance.

Justice, fairness, equality

Muhyiddin’s PN government is made up of political parties and leaders who were once part of PH.

These include Muhyiddin’s Bersatu party, Gombak MP Mohamed Azmin Ali and also leaders from Umno and PAS, who opposed parliamentary asset declarations.

Prominent Umno leaders, such as Najib Razak, Ahmad Zahid Hamidi and Tengku Adnan Tengku Mansor, are also currently on trial for fraud, abuse of power and money-laundering.

Former finance minister Lim Guan Eng said among other financial reforms PH carried out are open tenders for almost all procurement to prevent corruption and get the best value for every taxpayer ringgit.

The ministry also introduced more transparent financial reporting by revealing all government debt and liabilities.

PH was also shifting towards accrual accounting from cash-based accounting in 2021 to increase transparency and accountability.

PH was also attempting to set up the long-awaited Independent Police Complaints and Misconduct Commission (IPCMC) to end abuse and corruption in the police force.

The National Centre for Governance, Integrity and Anti-Corruption (GIACC) was working with states to implement the National Anti-Corruption Plan (NACP).

While Muhyiddin has not said if he would continue with any of these policies, he has committed the PN government to the SPV2030 plan.

All ministers were also given one month to declare their assets.

Ramon Navaratnam of the Centre for Public Policy Studies (CPPS) said PN must fulfil PH’s manifesto promises.

“Those that cannot be done must be tweaked but those that can be done, must be done immediately.

“The overriding consideration should be justice, fairness and equality,” said Ramon, a former Treasury senior official.

The goal of attaining socio-economic equality, which is espoused in SPV2030, cannot be done without institutional reforms, said Ramon.

Another economist, Dr Yeah Kim Leng said investors, who bring in quality investment and the high-paying jobs that follow, look for countries with strong institutions that have effective checks and balances.

“You need these institutions and the top talent they attract to manage processes that can support an advanced, industrial economy,” said Yeah of Sunway University.

“A country that wants to be an advanced economy cannot get there without reforming their institutions.” – March 12, 2020.